Maximize Impact: Year-End Giving Deadline Approaches

The Urgency of Year-End Charitable Giving

As the year winds down, many of us turn our thoughts to giving back and supporting causes close to our hearts. Charitable donations are not only a wonderful way to make a positive impact, but they can also offer significant tax benefits. With December 31, 2025, right around the corner, now is the time to ensure your contributions count towards this tax year.

Don't Miss the December 31, 2025, Deadline

To qualify for the 2025 tax year, your contributions need to be finalized by December 31. This includes checks postmarked by that date, credit card donations made even if the payment posts afterward, and online contributions that are date-stamped by December 31.

Explore the Tax Benefits of Charitable Giving

If you itemize deductions, charitable giving can help reduce your tax bill significantly. You may deduct up to 60% of your adjusted gross income for cash donations. Beyond cash, donating appreciated stocks or household goods allows you to avoid capital gains taxes while claiming their full value. For those 70½ or older, utilizing Qualified Charitable Distributions (QCDs) means you can give up to $108,000 from your IRA tax-free, aligning with your required minimum distributions starting at age 73.

Practical Advice to Maximize Giving Benefits

First and foremost, confirm your charity is IRS-qualified; this is critical for ensuring your gift is deductible. You can easily verify this through the IRS Tax Exempt Organization Search tool. Documentation is also key: obtain written acknowledgment for gifts $250 or more, and ensure you have a bank record or receipt for smaller donations.

If you're in a position to donate appreciated assets, consider this over cash. It could offer more substantial tax breaks due to the capital gains tax advantage. Additionally, consider if this year is financially advantageous for you to give more due to a higher income. The “bunching” strategy—accumulating donations into one year to exceed the standard deduction—can also be beneficial if you usually take the standard deduction.

Reap the Rewards of Generosity Before the Deadline

The benefits of charitable giving at year-end are twofold: help causes you believe in and enjoy potential tax savings. With the clock ticking towards December 31, you have time to act but not to procrastinate. By planning now, you can close the year on a high note both financially and philanthropically. If you're uncertain about how much to donate or the tax implications, consulting a financial professional can provide clarity and guidance.